AMD Shares Extend Winning Streak Amid Rival’s Struggles

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Advanced Micro Devices, Inc. (AMD) has just completed its longest consecutive run of gains in nearly six years. The equity rallied for nine straight trading sessions, surging more than 27 percent. In Friday's session, shares closed at $259.68, positioning the stock just below its 52-week peak of $267.08. This sustained upward momentum for AMD unfolds against a backdrop of significant challenges for its chief competitor, Intel.

All eyes are now on the company's upcoming earnings report scheduled for February 3. Market consensus projects fourth-quarter 2025 earnings of $1.32 per share, representing a year-over-year increase of 21.1 percent. Revenue is forecast to reach $9.65 billion, which would mark a 26 percent gain. In the prior quarter, AMD's data center segment delivered $4.3 billion in revenue, a 22 percent jump. The company has set an ambitious target for this division, aiming for an average annual growth rate exceeding 60 percent. The forthcoming figures will be critical in determining whether the current rally has staying power.

Intel's Setback Highlights AMD's Strategic Edge

The divergence in fortunes between the two semiconductor giants was starkly evident recently. Intel shares plummeted 17 percent in a single day last Friday, marking its worst trading session in eighteen months. The drop was triggered by the company's disclosure of significant supply constraints and a disappointing financial outlook. This contrast has served as a tailwind for AMD. As Mizuho analyst Jordan Klein noted, "Everything Intel said on its call is very good for AMD."

Intel is being forced to reallocate manufacturing capacity from its PC business to meet data center demand. AMD, in contrast, sources its chips exclusively from the Taiwan Semiconductor Manufacturing Company (TSMC), providing a more flexible and robust supply position. According to research from KeyBanc, AMD's server CPUs are nearly sold out for the current year. The company's fifth-generation EPYC processors are reported to significantly outperform Intel's competing server chips. Further strengthening the investment case are AMD's lower valuation multiples, despite similar exposure to artificial intelligence (AI) growth, coupled with its stronger revenue growth and superior profit margins.

Strategic Moves and Institutional Confidence

AMD continues to execute on its strategic initiatives. On January 22, the company released its Adrenalin 26.1.1 driver, which includes an AI software bundle designed to simplify the setup of AI systems utilizing Ryzen CPUs and Radeon GPUs. Furthermore, a new strategic partnership with Tata Consultancy Services is expected to broaden AMD's distribution channels and accelerate the adoption of its processors and graphics units in productive AI environments.

This operational progress is bolstered by institutional support. Cathie Wood's ARK Invest has identified AMD as a serious challenger to Nvidia's dominance in the data center market by 2026. This endorsement underscores the potential for valuation expansion should AMD continue to capture market share.

Revised Price Targets Reflect Growing Optimism

The positive sentiment is reflected in recent analyst actions. Wells Fargo raised its price target for AMD to $345, while Stifel Nicolaus increased its target to $280. The current consensus price target among analysts stands at $279.67. These adjustments highlight growing confidence in the company's trajectory as it capitalizes on its competitive advantages and the powerful tailwinds in the data center and AI sectors.